E-commerce giant Flipkart is in the middle of severe criticism and backlash after it delayed the joining dates of fresh recruits from India’s premier B-schools by seven months. To compensate for this delayed joining, Flipkart has promised a compensation package of Rs 1.5 lakh to all the candidates.

According to reports, IIM-Ahmedabad responded with a letter written to Binny Bansal, CEO Flipkart and Nitin Seth, CPO, Flipkart, to highlight the plight of the students, most of whom have taken heavy educational loans. As per the letter, this delay, plus the meagre compensation is bound to cause a lot of duress to the students and their families. The IIM-A management has even pointed that future relationship of Flipkart with B-school campuses is bound to get affected because of this. It has requested the Flipkart management to either scale down the period of deferment or the amount of compensation needs to be increased. Reportedly, Flipkart had given offers to around 10 candidates each at IIM-Ahmedabad and IIM-Bangalore, while it made offers at IIM-Lucknow too.

In response to this, Flipkart has issued a public statement on the company’s blog page with a post titled ‘Why has Flipkart delayed the joining dates of new campus recruits?’ In it, the company has cited reasons like working on restructuring their businesses to strike the right balance among key levers such as innovation, strategic execution, and operational excellence as the main reasons behind the delay.

It admitted that even though this decision is going to disappoint a lot of students, but it is important to bring the new recruits to an environment that is conducive to their overall learning and development. It further stated that they are confident of having all the trainees on board in December 2016 and there will be no further delay.

Currently, there is a lot of conversation on social media about this recruitment fiasco. From national dailies covering it on the front page to trolls, Flipkart is in news for all the wrong reasons.

Flipkart Big Shopping Days

Around the same time, Flipkart is also having their ‘Big Shopping Days’ from May 25 till 27. The sale this time is both on mobile app and website, offering discounts from 20-50% on mobiles, laptops, electrical and electronics, fashion and other categories. In order to promote the three day sale, Flipkart this time hasn’t gone out big in terms of advertising, like it usually does with full page front ads in national dailies. It has however released a TVC featuring Namit Das, who reiterates the fact that in Flipkart Sale only original and latest products will be available.

Click here to view the ad:

According to reports, the sale has started on a low note, especially at a time when the Department of Industrial Policy & promotion (DIPP) has introduced their new policy in March this year. As per the guidelines, not only are ecommerce firms barred from offering discounts under the new policy, they also cannot offer promotional schemes like cashbacks to attract shoppers. The warranty of goods and services and after-sales service too will be provided by sellers and not the ecommerce company.

High-profile exits

On Wednesday this week, Abhijit Bhattacharya Director Brand Marketing & Head Media left Flipkart stepped down from his position. He had joined Flipkart as Associate Director - Brand Marketing - Head, Media and Social Media in October 2014. Even the prized Silicon Valley hire Punit Soni, Chief Product Officer at Flipkart also quit the company recently. He was hired from Google in 2014 with the intention of helping the player transform the market place into a mobile-first platform. In February this year, Mukesh Bansal, head of commerce and advertising platform at the organisation had resigned. The founder of Myntra announced his exit along with his colleague Ankit Nagori, Chief Business Officer.

Devaluation

For the first time in its history, Flipkart’s valuation was devalued. In February this year, Morgan Stanley ruthlessly trimmed down Flipkart’s valuation from $15.2 billion to $11.1 billion – a full 27% down. Post which, mutual fund management firm T Rowe Price has reduced the value of its stake in Flipkart by 15%, becoming the second investor to mark down the online retailer's estimated worth. Following the valuation mark down, Flipkart is struggling to raise funds at its preferred valuation.

Marketing Strategy

In March, right after Amazon released their ads addressing consumer’s dilemma before shopping online, Flipkart came out with ads following a similar strategy. They released two ads under the campaign titled ‘Flipkart Matlab Bilkul Pakka’, which roped in popular actors like Amol Palekar and Namit Das. Using quirkiness in the dialogues and by infusing an element of fun, the brand has taken this strategy to highlight some key features about shopping on Flipkart. Even though the brand has roped in popular faces; its campaigns are not much effective when compared with its competitor Amazon, which has been running widely successful campaigns.